THE PROPOSED EUROPEAN BANK for Reconstruction and Development seems designed to do more for the West European donors than for the intended beneficiaries in Eastern Europe. The unseemly battle over the location of the new institution stands as evidence.

This weekend, the United States, Japan and the European Community will decide where the bank is to be housed. London has the inside track, followed by Paris and Vienna. East European capitals such as Warsaw and Prague aren't even on the list, despite the impetus - amply demonstrated in Washington - that a big multilateral institution can give to its host city's growth.Advocates of London and Paris claim that cities in the former communist states lack the infrastructure to accommodate the bank. Placing it there may be the best way to make sure that infrastructure is developed very quickly.

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